Reports from the Economic Front

a blog by Marty Hart-Landsberg

TTIP Dangers Revealed

The US government and and the European Commission are negotiating a major so-called free trade agreement, the Transatlantic Trade and Investment Partnership (T-TIP).

According to the US government:

T-TIP will help unlock opportunity for American families, workers, businesses, farmers and ranchers through increased access to European markets for Made-in-America goods and services. This will help to promote U.S. international competitiveness, jobs and growth.

However, it is hard to see great benefits from expected tariff reductions since both sides already have low average tariff rates.  For example, the average tariff rate for manufactured products in the European Union was 1.43 in 2013.  Its highest value over the past 25 years was 5.86 in 1990; its lowest value was 1.41 in 2012.

But of course much more is at stake than simply lowering already low tariffs.  The secret negotiations are really about removing regulatory barriers that get in the way of large corporations maximizing their profits, barriers like food safety law, environmental legislation, banking regulations and the sovereign powers of individual nations.

This may sound extreme, but judge for yourself thanks to Greenpeace Netherlands.  On May 1st,  it published 248 pages of leaked T-TIP negotiating texts.  According to Greenpeace, these “classified documents represent more than two-thirds of the overall TTIP text as of April, at the 13th round of TTIP negotiations in New York. They cover 13 chapters addressing issues ranging from telecommunications to regulatory cooperation, from pesticides, food and agriculture to trade barriers.”

Among other things they highlight the aggressive US attempt to dramatically weaken already low European Union safety and health regulations.

The following excerpts from a Guardian article provide some of the specifics:

Talks for a free trade deal between Europe and the US face a serious impasse with “irreconcilable” differences in some areas, according to leaked negotiating texts.

The two sides are also at odds over US demands that would require the EU to break promises it has made on environmental protection. . . .

“Discussions on cosmetics remain very difficult and the scope of common objectives fairly limited,” says one internal note by EU trade negotiators. Because of a European ban on animal testing, “the EU and US approaches remain irreconcilable and EU market access problems will therefore remain,” the note says.

Talks on engineering were also “characterised by continuous reluctance on the part of the US to engage in this sector,” the confidential briefing says.

These problems are not mentioned in a separate report on the state of the talks, also leaked, which the European commission has prepared for scrutiny by the European parliament.

These outline the positions exchanged between EU and US negotiators between the 12th and the 13th round of TTIP talks, which took place in New York last week.

The public document offers a robust defence of the EU’s right to regulate and create a court-like system for disputes, unlike the internal note, which does not mention them.

Jorgo Riss, the director of Greenpeace EU, said: “These leaked documents give us an unparalleled look at the scope of US demands to lower or circumvent EU protections for environment and public health as part of TTIP. The EU position is very bad, and the US position is terrible. The prospect of a TTIP compromising within that range is an awful one. The way is being cleared for a race to the bottom in environmental, consumer protection and public health standards.”

US proposals include an obligation on the EU to inform its industries of any planned regulations in advance, and to allow them the same input into EU regulatory processes as European firms.

American firms could influence the content of EU laws at several points along the regulatory line, including through a plethora of proposed technical working groups and committees.

“Before the EU could even pass a regulation, it would have to go through a gruelling impact assessment process in which the bloc would have to show interested US parties that no voluntary measures, or less exacting regulatory ones, were possible,” Riss said.

The US is also proposing new articles on “science and risk” to give firms greater regulatory say. Disputes over pesticides residues and food safety would be dealt with by the UN Food and Agriculture Organisation’s Codex Alimentarius system.

Environmentalists say the body has loose rules on corporate influence, allowing employees of companies such as BASF, Nestle and Coca Cola to sit on – and sometimes lead – national delegations. Some 44% of its decisions on pesticides residues have been less stringent than EU ones, with 40% of rough equivalence and 16% being more demanding, according to Greenpeace.

GM foods could also find a widening window into Europe, with the US pushing for a working group to adopt a “low level presence initiative”. This would allow the import of cargo containing traces of unauthorised GM strains. The EU currently blocks these because of food safety and cross-pollination concerns.

The EU has not yet accepted the US demands, but they are uncontested in the negotiators’ note, and no counter-proposals have been made in these areas.

In January, the EU trade commissioner Cecilia Malmström said the precautionary principle, obliging regulatory caution where there is scientific doubt, was a core and non-negotiable EU principle. She said: “We will defend the precautionary approach to regulation in Europe, in TTIP and in all our other agreements.” But the principle is not mentioned in the 248 pages of TTIP negotiating texts. . . .

The EU negotiators internal note says “the US expressed that it would have to consult with its chemical industry on how to position itself” on issues of market access for non-agricultural goods.

Where industry lobbying in regulatory processes is concerned, the US also “insisted” that the EU be “required” to involve US experts in its development of electrotechnical standards.

Of course, this might be a one-sided look.  No doubt European corporations are pushing hard to undermine US regulations that they find objectionable.   One can imagine a terrible compromise where the two sides split the difference, leaving majorities on both sides of the Atlantic less healthy and safe.

17ttip-glynthomas

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